U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-QSB


             [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                    For the quarter ended September 30, 2002
                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                        Commission file number 000-49636


                              VIKING SYSTEMS, INC.
           (Name of Small Business Issuer as specified in its charter)

                  Nevada                                 86-0913802
       -------------------------------               -------------------
       (State or other jurisdiction of               (I.R.S. employer
        incorporation or organization                identification No.)

               7514 Girard Ave, Suite 1509, La Jolla, CA 92037
               ---- ------ ---- ----- ----- -- ------ -- -----
                   (Address of principal executive offices)

       Registrant's telephone no., including area code: (858) 456-6608

                          2501 Dunlap Avenue, Suite 102
                                   Phoenix, AZ
                            Telephone (602) 678-5544
                                       and
                      4131 North 24th Street, Suite C-202
                                Phoenix, AZ 85016
                            Telephone (602) 288-7247
              Former name, former address, and former fiscal year,
                          if changed since last report.

    Securities registered pursuant to Section 12(b) of the Exchange Act: None

   Securities registered pursuant to Section 12(g) of the Exchange Act: $.001
                             Par Value Common Stock

Check  whether  the Issuer  (1) has filed all  reports  required  to be filed by
Section 13 or 15(d) of the Exchange  Act during the  preceding 12 months (or for
such shorter period that the registrant was required to file such reports),  and
(2) has been subject to such filing requirements for the past 90 days. (1) Yes__
No X (2) Yes X No____.

Common  Stock  outstanding  at January 8, 2004 -  6,249,650  shares of $.001 par
value Common Stock.

                  DOCUMENTS INCORPORATED BY REFERENCE: NONE


<PAGE>



                                   FORM 10-QSB

                       FINANCIAL STATEMENTS AND SCHEDULES
                              VIKING SYSTEMS, INC.

                    For the Quarter ended September 30, 2002

      The following financial statements and schedules of the registrant are
      submitted herewith:

                         PART I - FINANCIAL INFORMATION
                                                                         Page of
                                                                     Form 10-QSB
                                                                     -----------
Item 1. Financial Statements:

            Unaudited Balance Sheet                                            3
            Unaudited Statement of Operations                                  4
            Unaudited Statement of Cash Flows                              5 - 6
            Notes to Condensed Financial Statements                       7 - 11

Item 2. Management's Discussion and Analysis of Financial Condition
        and Results of Operations                                             12

Item 3. Controls and Procedures, Evaluation of Disclosure Controls and
        Procedures                                                            21


                           PART II - OTHER INFORMATION

                                                                            Page

Item 1. Legal Proceedings                                                     22
Item 2. Changes in the Rights of the Company's Security Holders               22
Item 3. Defaults by the Company on its Senior Securities                      22
Item 4. Submission of Matters to Vote of Security Holders                     22
Item 5. Other Information                                                     22
Item 6(a).  Exhibits                                                          22
Item 6(b).  Reports on Form 8-K                                               22

                                       2

<PAGE>


                                                            VIKING SYSTEMS, INC.
                                                         Unaudited Balance Sheet

                                                              September 30, 2002
--------------------------------------------------------------------------------

         Assets
         ------

Current assets:
  Cash                                                                $     489
  Accounts receivable                                                     2,789
  Prepaid expenses                                                          269
                                                                      ----------

          Total current assets                                            3,547

Property and equipment, net                                                 943
                                                                      ----------

                                                                      $   4,490
                                                                      ----------

--------------------------------------------------------------------------------

         Liabilities and Stockholders' Deficit

Current liabilities:
  Accounts payable                                                       27,969
  Related party notes payable                                             7,245
                                                                      ----------


          Total current liabilities                                      35,214
                                                                      ----------

Stockholders' deficit:
  Preferred stock, $.001 par value, 5,000,000 shares
    Authorized, no shares issued and outstanding                              -
  Common stock, $.001 par value, 20,000,000 shares
    Authorized;  2,656,150 shares issued and outstanding                  2,656
  Additional paid-in capital                                            258,494
  Accumulated deficit                                                  (291,874)
                                                                      ----------


          Total stockholders' deficit:                                  (30,724)
                                                                      ----------

                                                                      $   4,490
                                                                      ----------

--------------------------------------------------------------------------------

See accompanying notes to financial statements.

                                       3

<PAGE>


                                                            VIKING SYSTEMS, INC.
                                               Unaudited Statement of Operations

--------------------------------------------------------------------------------


                                     3 Months Ended          9 Months Ended
                                     September 30,            September 30,
                                    2002       2001         2002        2001
                                 (unaudited)(unaudited)  (unaudited) (unaudited)
                                 -----------------------------------------------


Revenue                          $   13,785  $    2,751  $   23,594  $    7,395
                                 -----------------------------------------------



Cost of revenue                       7,459           -       7,459            -

General and administrative
   expenses                          10,779      10,229      31,849      48,989
                                 -----------------------------------------------

Net loss before income taxes         (4,453)     (7,478)    (15,714)    (41,594)

Income tax benefit                        -           -           -           -
                                 -----------------------------------------------

Net loss                         $   (4,453) $   (7,478) $  (15,714) $  (41,594)
                                 -----------------------------------------------

Net loss per common share -
   basic and diluted             $    (0.00) $    (0.00) $    (0.01) $    (0.02)
                                 -----------------------------------------------

Weighted average number of
   common shares - basic and
   diluted                        2,576,864   2,471,150   2,506,518   2,104,551
                                 -----------------------------------------------

--------------------------------------------------------------------------------

See accompanying notes to financial statements.

                                       4

<PAGE>

                                                            VIKING SYSTEMS, INC.
                                               Unaudited Statement of Cash Flows

                                                 Nine Months Ended September 30,
--------------------------------------------------------------------------------

                                                       2002            2001
                                                   (unaudited)     (unaudited)
                                                   -------------   -------------

Cash flows from operating activities:
  Net loss                                         $    (15,714)   $    (41,594)
  Adjustments to reconcile net loss to net cash
    used in operating activities:
    Depreciation and depletion                            2,311           4,628
    Decrease (increase) in:
      Accounts receivable                                (1,659)          6,112
      Prepaid expense                                       433            (227)
    Increase (decrease) in:
      Cash overdraft                                          -          (2,630)
      Accounts payable                                      845          (8,632)
                                                   -----------------------------

          Net cash used in operating activities         (13,784)        (42,343)
                                                   -----------------------------

Cash flows from investing activities:
        Purchase of property and equipment                    -            (128)
                                                   -----------------------------

Cash flows from financing activities:
  Issuance of common stock                                    -          35,000
  Proceeds on related party notes payable                13,057           7,500
                                                   -----------------------------

          Net cash used in
          financing activities                           13,057          42,500
                                                   -----------------------------

          Net change in cash and cash equivalents          (727)             29

Cash and cash equivalents at beginning of period          1,216               -
                                                   -----------------------------

Cash and cash equivalents at end of period         $        489     $        29
                                                   -----------------------------


--------------------------------------------------------------------------------

See accompanying notes to financial statements.

                                       5

<PAGE>


                                                            VIKING SYSTEMS, INC.
                                                         Statement of Cash Flows
                                                                     (Continued)
--------------------------------------------------------------------------------

Supplemental cash flow information:

      During the nine months ended September 30, 2002 the Company issued 185,000
      shares of common stock to retire related party notes payable of $18,500.

      No amounts were paid for interest or income taxes during the period ended
      September 30, 2002 and 2001.


--------------------------------------------------------------------------------

See accompanying notes to financial statements.

                                       6

<PAGE>

                                                            VIKING SYSTEMS, INC.
                                                   Notes to Financial Statements

                                                              September 30, 2002
--------------------------------------------------------------------------------

1. Organization     Organization and Business
   and Summary      Viking  Systems,  Inc.,  (the  Company)  was organized  as a
   of Significant   corporation  in  the state of Nevada on  May 28,  1998,  for
   Accounting       the  purpose of  providing  training and  curriculum for the
   Policies         information  technology  industry.  During 2001  the Company
                    changed its  business focus  to the development of  software
                    applications, hardware  sales and leasing, and  training and
                    support.

                    Concentration of Credit Risk
                    The  Company  maintains  its cash in bank  deposit  accounts
                    which, at times,  may exceed federally  insured limits.  The
                    Company has not  experienced  any losses in such account and
                    believes it is not exposed to any significant credit risk on
                    cash and cash equivalents.

                    Financial  instruments which potentially subject the Company
                    to concentration  of credit risk consist  primarily of trade
                    receivables.  In the normal course of business,  the Company
                    provides credit terms to its customers.  When necessary, the
                    Company performs ongoing credit evaluations of its customers
                    and maintains  allowances  for possible  losses which,  when
                    realized,   have  been  within  the  range  of  management's
                    expectations.

                    Cash and Cash Equivalents
                    The Company  considers  all highly  liquid debt  instruments
                    with  a  maturity  of  three  months  or  less  to  be  cash
                    equivalents.

                    Property and Equipment
                    Property  and   equipment   are   recorded  at  cost,   less
                    accumulated  depreciation.  Depreciation is calculated using
                    the  straight-line  method  over  the  useful  lives  of the
                    equipment.  Expenditures  for  maintenance  and  repairs are
                    expensed  when  incurred and  betterments  are  capitalized.
                    Gains  and  losses on sale of  property  and  equipment  are
                    reflected in operations.

--------------------------------------------------------------------------------

                                       7

<PAGE>


                                                            VIKING SYSTEMS, INC.
                                                   Notes to Financial Statements
                                                                     (Continued)
--------------------------------------------------------------------------------


1. Organization     Income Taxes
   and Summary      Deferred  income taxes  are provided, in  amounts sufficient
   of Significant   to  give effect to timing differences  between financial and
   Accounting       tax reporting.
   Policies
   (Continued)      Use of Estimates in the Preparation of Financial Statements
                    The  preparation of financial  statements in conformity with
                    accounting  principles  generally  accepted  in  the  United
                    States of America requires  management to make estimates and
                    assumptions  that affect the reported  amounts of assets and
                    liabilities   and   disclosure  of  contingent   assets  and
                    liabilities at the date of the financial  statements and the
                    reported   amounts  of  revenues  and  expenses  during  the
                    reporting  period.  Actual  results  could differ from those
                    estimates.

                    Earnings Per Common and Common Equivalent Share
                    The  computation  of  basic  earnings  per  common  share is
                    computed using the weighted  average number of common shares
                    outstanding during the year.

                    The  computation  of diluted  earnings  per common  share is
                    based on  weighted  average  number  of  shares  outstanding
                    during the year plus common  stock  equivalents  which would
                    arise from the  exercise of stock  options  and/or  warrants
                    outstanding  using the treasury stock method and the average
                    market  price  per  share  during  the  year.  Common  stock
                    equivalents  are not  included in the diluted  earnings  per
                    share calculation when their effect is antidilutive.

--------------------------------------------------------------------------------

                                       8

<PAGE>


                                                            VIKING SYSTEMS, INC.
                                                   Notes to Financial Statements
                                                                     (Continued)
--------------------------------------------------------------------------------


2. Going            The  financial statements  do  not include  any  adjustments
   Concern          that might  be necessary  should the  Company be  unable  to
                    continue as a going concern. The Company's continuation as a
                    going  concern is  dependent  upon its  ability to  generate
                    sufficient  cash  flow to meet its  obligations  on a timely
                    basis,  to obtain  additional  financing as may be required,
                    and ultimately to attain profitability. Potential sources of
                    cash include continued contributions of services by officers
                    of the Company,  loans from officers,  sale of the Company's
                    stock, profitable operations,  external debt, or alternative
                    methods such as mergers or sale transactions.  No assurances
                    can be  given,  however,  that the  Company  will be able to
                    obtain any of these potential sources of cash.

3. Subsequent       In  October  2002,  the Company agreed to  convert $2,000 of
   Events           related  party  notes  payable  to  20,000  shares of common
                    stock.

                    On December 31, 2002, the Company's  management and board of
                    directors decided to discontinue  current  operations due to
                    the Company's insufficient cash flows to support operations.

                    In December 2002, the Company issued 15,000 shares of common
                    stock in satisfaction of services received totaling $1,500.

                    In August  2003,  the  Company  agreed to convert  $1,000 of
                    related  party  notes  payable  to  10,000  shares of common
                    stock.  In  addition,  subsequent  to year end,  the Company
                    obtained an additional $1,600 in related party notes payable
                    that it converted to 16,000 shares of common stock.

                    In October 2003,  the Company issued 47,500 shares of common
                    stock in satisfaction of services  received  totaling $4,250
                    incurred  in 2003 as well as  another  note  payable  from a
                    related party in the amount of $500.

                    In November  2003,  the Company  entered into stock purchase
                    agreements  with an  individual  and a company  whereby they
                    have agreed to purchase  3,450,000 shares of common stock at
                    a purchase price of $69,000.

--------------------------------------------------------------------------------

                                       9

<PAGE>


                                                            VIKING SYSTEMS, INC.
                                                   Notes to Financial Statements
                                                                     (Continued)
--------------------------------------------------------------------------------

3. Subsequent       In December  2003, the Company agreed  to convert $3,000  of
   Events           related  party  notes  payable  to 30,000  shares  of common
   (Continued)      stock.

                    In December 2003, the Company entered into an asset purchase
                    agreement where the Company will acquire  certain  operating
                    assets from a company for the following considerations:  (i)
                    cash in the amount not to exceed $400,000; (ii) the issuance
                    of approximately 3,054,000 shares of common stock; and (iii)
                    the assumption of certain liabilities.

                    In December  2003,  the Company  granted an  individual  the
                    option to purchase  5,000,000 shares of the Company's Series
                    A  Preferred  Stock.  Each share of the  Series A  Preferred
                    Stock is  convertible  into 4 shares of common  stock.  Each
                    share of Series A Preferred Stock will have four votes.

                    In order to have sufficient number of shares of common stock
                    authorized  for  issuance  at  conversion  of the  Series  A
                    Preferred   Stock   and  to  allow  for   future   financing
                    transactions,   the  board  of  directors   intend  to  seek
                    shareholder  consent  to amend  the  Company's  Articles  of
                    Incorporation  to  increase  the  number of shares of common
                    stock  and  the  number  of  shares  of   preferred   stock,
                    authorized.

4. Unaudited        The unaudited  financial  statements  include  the  accounts
   Financial        of  the Company  and include all  adjustments (consisting of
   Statements       normal  recurring  items),  which  are,  in  the  opinion of
                    management,   necessary  to  present  fairly  the  financial
                    position  as of  September  30,  2002  and  the  results  of
                    operations  for the quarter and nine months ended  September
                    30, 2002 and 2001 and cash flows for the nine  months  ended
                    September 30, 2002 and 2001.  The results of operations  for
                    the quarter and nine months ended September 30, 2002 are not
                    necessarily indicative of the results to be expected for the
                    entire year.

--------------------------------------------------------------------------------

                                       10

<PAGE>


                                                            VIKING SYSTEMS, INC.
                                                   Notes to Financial Statements
                                                                     (Continued)
--------------------------------------------------------------------------------


5. Basis of         The accompanying  unaudited financial  statements have  been
   Presentation     prepared by management in  accordance with the  instructions
                    in  Form   10-QSB  and,   therefore,   do  not  include  all
                    information and footnotes required by accounting  principles
                    generally  accepted  in the  United  States of  America  and
                    should, therefore, be read in conjunction with the Company's
                    Form  10-KSB,   filed  with  the   Securities  and  Exchange
                    Commission. These statements do include all normal recurring
                    adjustments, which the Company believes necessary for a fair
                    presentation  of  the  statements.  The  interim  operations
                    results are not  necessarily  indicative  of the results for
                    the entire year.


--------------------------------------------------------------------------------

                                       11

<PAGE>



                                     ITEM 2
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In this report  references  to  "Viking,"  "we," "us," and "our" refer to Viking
Systems, Inc.

General

     Viking was incorporated in Nevada on May 28, 1998. We have recently changed
our business plan and our management.  Our previous business operations had been
limited and did not result in (i) significant revenues, (ii) the accumulation of
a significant  dollar amount of assets, or (iii) in earnings.  Because of a lack
of  funds,  we were  unable  to fund the  costs  of  complying  with our  filing
requirements  under  Section  13 of the  Securities  Exchange  Act of  1934,  as
amended.  In  November  2003,  our  Board  of  Directors,  as then  constituted,
considered  and approved a proposal  from a third party  relating to a change of
Viking's business plan and an infusion of capital.  A new Board of Directors and
new officers have been  appointed,  a limited  amount of capital has been raised
and a commitment  for  additional  capital has been  obtained.  Our new Board of
Directors  has adopted a new  business  plan which calls for Viking to engage in
the medical device market.  Our plan is to complete a series of  acquisitions in
the medical device market,  initially focusing on companies with vision, optics,
laser, sensor and other medical technology.

     On December 22, 2003, we entered into an Asset  Purchase  Agreement for our
first acquisition.  See "Acquisition  Agreement with Vista Medical Technologies,
Inc.".

     As a result of the recent changes in our business plan, the  termination of
our previous  operations,  and the issuance of  additional  shares of our common
stock, the financial statements and other financial information contained herein
do not provide meaningful  information as to our future operations and financial
position.

Change of Management

     As a result of our change of business plan, new directors and officers have
been  appointed.  Our current Board of Directors  and executive  officers are as
follows:

      Thomas B. Marsh         President/CEO/Secretary/Chairman  of  the  Board
                              of Directors
      Dennis Blomquist*       Chief Financial Officer/Director
      Daniel F. Crowley       Director

     Mr. Blomquist was President and a Director of Viking prior to the change of
our business plan. His  biographical  information is contained in the reports we
have previously filed with the Securities and Exchange  Commission.  Information
about Mr. Marsh and Mr. Crawley is as follows:

     Thomas B. Marsh. Mr. Marsh, age 50, was appointed President and Director of
Viking in  November  2003.  He has also  served as  secretary,  treasurer  and a

                                       12

<PAGE>


director of  PurchaseSoft,  Inc.  since August 5th, 2002. Mr. Marsh is a Partner
and co-founder of Marsh+Flagg.  Marsh+Flagg is a merger and acquisition advisory
firm with offices in La Jolla & Newport Beach, California and Stuttgart Germany.
Prior to PurchaseSoft and Marsh+Flagg,  Marsh was COO at Co-Mack Technology, CEO
of Emark Corporation and President of Spectrum  Companies  International.  Marsh
attended Williams College with a major in economics.

       Daniel F Crowley. Mr. Crowley, age 54, has been a private investor and
business consultant since 2002. Mr. Crowley is a principal in and co-founder of
Spectrum Partners LLC, a business strategy and development advisory firm,
specializing in the transportation and logistics industry, with offices in
Scottsdale, Arizona. Prior to Spectrum Partners LLC, Mr. Crowley was Executive
VP & CFO at BAX Global from 1998 through 2002. Previous positions include senior
management positions with Frito-Lay International, and Grand Metropolitan PLC
companies including The Pillsbury Company and Pearle Vision. Mr. Crowley has a
CPA from the State of New York, a MBA in Finance from Columbia University
Graduate School of Business, and a BA from Columbia College.

Change of Voting Control

     Prior to November 24, 2003,  there were  2,528,500  shares of Viking common
stock issued and  outstanding.  On November 24, 2003,  Viking entered into Stock
Purchase  Agreements  with  Donald E.  Tucker  and  Troika  Capital  Investment.
Pursuant to the Stock Purchase Agreement with Mr. Tucker,  Viking sold 3,200,000
shares of our common stock to Mr. Tucker for $64,000 or $.02 per share. Pursuant
to the Stock  Purchase  Agreement with Troika  Capital  Investment,  Viking sold
250,000  shares of our  common  stock to Troika  Capital  for $5,000 or $.02 per
share.  Mr. Tucker owns 3,200,000 or 53.5 per cent of the shares of common stock
issued.  He also has been granted an option to purchase  5,000,000 shares of our
Series A Preferred Stock.  Troika Capital Investments is an affiliate of Mark A.
Scharmann. Troika Capital Investments and its affiliates owns 530,000 or 8.9 per
cent of the shares of common stock issued.

     Information about Donald E. Tucker is as follows:

     Donald E. Tucker. Donald E. Tucker, age 49, is a Senior Partner with one of
the world's largest  consulting and technology  company and has over 24 years of
consulting  experience across a number of industry segments. He has held several
management and leadership  positions  during his career and currently has global
responsibility  for the Medical  Technology,  Diagnostics  and Devices  industry
segment, as well as the west coast biotech/pharmaceutical market. He has primary
responsibility  for  establishing  global market and  operational  leadership in
these  industry  segments and is an advisor to a number of  associations  in the
life sciences  industry.  Mr. Tucker has experience and has been involved in the
strategy,  planning and  implementation  of large-scale  complex change programs
with extensive  experience in new product  development,  supply chain management
and  commercial  operations.  He has served  numerous  Fortune 100  companies in
planning and executing global mergers, consolidating operations and implementing
new strategic  capabilities.  He has worked extensively throughout the America's
and Europe.  From 1997 to 2000, Mr. Tucker led the development and operations of
a west  coast  Business  Launch  Center,  where  over 16 new  technology-centric

                                       13

<PAGE>

businesses  were formed,  funded and launched.  Mr. Tucker  graduated  Magna Cum
Laude with a BS degree in business management from Northern Michigan University.

Series A Convertible Preferred Stock

     Donald E. Tucker has provided us with funds to be used to pay  professional
fees  related  to  various  corporate  filings  and to pay for  other  corporate
expenses.  In exchange for such funds, we issued Mr. Tucker  3,200,000 shares of
our common stock at a price of $.02 per share. In order to fund the cash portion
of the purchase  price of the assets we are  purchasing  from Vista,  we need to
raise  an  additional  $400,000.  We have  requested  that Mr.  Tucker  purchase
additional  shares of our capital  stock in the amount of $400,000 to provide us
with the funds  necessary to make such cash  payment.  Mr.  Tucker has agreed to
make such  additional  investment in Viking on the same terms and  conditions as
his initial purchase of 3,200,000 shares of our common stock.

     We do not currently have sufficient  shares of common stock  authorized for
issuance to Mr. Tucker to fund the $400,000  requirement  of the  acquisition of
assets.  We do have 5,000,000  shares of preferred stock authorized which may be
designated  in one or  more  series  with  such  characteristics  as  determined
appropriate  by our board of directors.  Our board of directors  has  determined
that it is in the best interests of Viking and its shareholders to designate and
establish a Series A Preferred  Stock.  We have granted Mr.  Tucker an option to
purchase  5,000,000  shares  of our  Series  A  Preferred  Stock.  The  Series A
Preferred Stock consists of 5,000,000 shares of Preferred  Stock.  Each share of
Series A Preferred  Stock is  convertible  into  shares of our common  stock the
basis of one  share of Series A  Preferred  Stock  convertible  into 4 shares of
common  stock.  Each  share of Series A  Preferred  Stock has four  votes in all
matters  submitted to  shareholders  for a vote.  Dividends do not accrue on the
Series A Preferred Stock.

     In order to have a sufficient  number of shares of common stock  authorized
for  issuance  in  conversion  of the Series A Preferred  Stock,  and for use in
future financing  transactions,  we intend to seek shareholder  consent to amend
our  Articles of  Incorporation  to increase  the number of shares of our common
stock, and the number of shares of preferred stock, authorized.

Acquisition Agreement with Vista Medical Technologies, Inc.

     On December  22, 2003,  Viking  entered  into an Asset  Purchase  Agreement
("Purchase  Agreement")  with Vista  Medical  Technologies,  Inc.  ("Vista"),  a
Delaware  corporation.  Pursuant to the  Purchase  Agreement,  Viking  agreed to
purchase, subject to the terms and conditions of the Purchase Agreement, certain
assets used by Vista in its medical device and technology business (the "Medical
Technology Business").  In addition to the purchase of assets from Vista, Viking
will, at the closing of the acquisition,  enter into a "License  Agreement" with
Vista whereby Viking will have the exclusive, worldwide license to commercialize
certain  intellectual  property  owned  by Vista  which  is used in the  Medical
Technology Business. The closing of the Purchase Agreement is subject to several
conditions,  including but not limited to, approval by Vista's  stockholders and
accordingly,  there can be no assurance that the agreed upon acquisition will be
completed.  If all conditions of the Purchase Agreement are fulfilled or waived,
we anticipate  that the Purchase  Agreement will close at the end of February or
the first part of March 2004.

                                       14

<PAGE>


     Description  of  Business.  We have agreed to purchase  assets and licenses
technologies from Vista that will, upon closing, allow us to operate the Medical
Technology Business. We intend, through our operations of the Medical Technology
Business, to develop, manufacture and market products which provide surgeons and
interventional  physicians performing complex minimally invasive procedures with
a more effective,  ergonomic method of  visualization of anatomical  structures.
Our products  will involve 3-D  Visualization  which is generally  regarded as a
critical  enabler  to  the  broader  adoption  of  complex  minimally   invasive
procedures in numerous clinical specialties.

     We  anticipate  that our  principal  product  line  related to the  Medical
Technology Business will be the Endosite Advanced  Visualization and Information
System for general  surgery,  which combines a stereo head mounted  display with
3-D  video  cameras  to  provide  critical  visual  information  during  complex
minimally invasive  procedures,  combined with the real-time ability to view new
additional  information  in a  voice-controlled,  picture-in-picture  format  to
facilitate  decision-making.  The  Vista  head  mounted  display,  incorporating
picture-in-picture capability and voice control, is designed to give the surgeon
ergonomic  real-time  access to such critical  information,  integrated with the
anatomical images generated by the endoscopic camera systems.

     All necessary  510(k)  clearances and CE marks which are required to market
the components of the EndoSite System have been received.

     General Terms of the Purchase  Agreement.  The Purchase  Agreement provides
that  Viking  will  acquire  from  Vista,  the assets  relating  to the  Medical
Technology Business for the following considerations:  (i) cash in an amount not
exceeding $400,000;  (ii) the issuance of approximately  3,054,000 shares of our
common stock to Vista; and (iii) the assumption of certain liabilities  relating
to the Medical Technology Business and the assets purchased.  The closing of the
purchase  is  subject  to  several  conditions  including  the  approval  of the
transaction by the stockholders of Vista.  Vista anticipates that it will hold a
Special Meeting of Stockholders during the last week of February to consider and
vote upon the sale of assets pursuant to the Purchase Agreement.

     The acquisition agreement contains customary representations and warranties
relating to each company's corporate status, corporate authority to complete the
acquisition,  capital structure and corporate conduct prior to the closing. Each
company  provided  corporate  documentation  to  the  other  for  due  diligence
purposes.  Also, Vista agreed to conduct its business in the normal course,  and
not to sell,  pledge, or assign any assets,  amend its articles of incorporation
or bylaws prior to the closing of the transaction.

     Currently  27  employees  of Vista are  employed in the Medical  Technology
Business.  One of these employees will retain  employment with Vista and we will
offer  the  remaining  employees  employment  in our  operation  of the  Medical
Technology Business.

     We have  agreed to appoint  John Lyons,  the CEO of Vista,  to our board of
directors at the time of the closing of the purchase transaction.

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     License Agreement.  In addition to the assets we are purchasing from Vista,
we  are  also  licensing  certain   "Intellectual   Property"  from  Vista.  The
Intellectual  Property we are  licensing  includes any and all  patents,  patent
registrations,  patent  applications,  data  rights,  utility  models,  business
processes,  trademarks,  trade  secrets,  know how,  trade names,  registered or
unregistered designs, mask works, copyrights, moral rights and any other form of
proprietary  protection  afforded  by  law  to  intellectual  property,  or  any
applications  therefore,  which arises or is  enforceable  under the laws of the
United States, any other jurisdiction or any bi-lateral or multi-lateral  treaty
regime which relate to the Medical Technology Business.

     The License  Agreement,  which will be  effective on the date of closing of
Purchase  Agreement,  requires us to pay a royalty of 5% of gross  revenues  (as
defined in the License Agreement) for certain product sales transactions and 10%
of gross revenues for other product sales  transactions.  The License  Agreement
grants us the worldwide,  exclusive license to use the Intellectual  Property to
manufacture,  market,  sublicense or otherwise  commercialize products using the
technology included in the Intellectual Property. The License Agreement provides
for minimum annual royalties ranging from $175,000 to $375,000 per year.

     The royalties  agreed to in the License  Agreement are to be paid until the
earlier of the date on which we have paid  Vista an  aggregate  of Four  Million
Five Hundred Thousand Dollars ($4,500,000) or the fifth anniversary of effective
date of the  License  Agreement.  ("Total  Royalty").  If we pay Vista the Total
Royalty,  Vista is required to assign and transfer to us all of Vista's  rights,
title  and  interests  in and to the  Intellectual  Property  for no  additional
consideration.

     If we fail to pay the required  minimum  royalties are otherwise breach the
License Agreement, Vista may terminate the license.

     Consideration  for the Acquisition.  The  consideration we are to pay Vista
pursuant to the  Purchase  Agreement  was  negotiated  at "arms  length" and our
management  relied  on  representations  made by  Vista's  management  and other
documents and information provided to us. Our management considered factors used
in similar  proposals to determine the amount of  consideration  appropriate for
the acquisition of the assets.  These factors included the relative value of the
assets, the present and past operations of the Medical Technology Business,  the
future potential of the Medical Technology Business, the continued employment of
employees of the Medical Technology  Business,  and the potential benefit of the
transaction to the stockholders of Viking.

     Our board of directors  determined that the terms of the Purchase Agreement
and License Agreement are reasonable based upon the above factors. Our board did
not seek a third party  fairness  opinion or any  valuation  or appraisal of the
terms of the transaction.  Thus, our stockholders will not have the benefit of a
third  party  opinion  that the  terms of the  Purchase  Agreement  and  License
Agreement  are fair from a  financial  point of view.  In order to fund the cash
portion of the purchase price of the assets,  we will sell  5,000,000  shares of
our Series A Convertible Preferred Stock to Donald Tucker for $400,000.

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Liquidity and Capital Resources

     As of September 30, 2002, we had total assets of $4,490,  of which $489 was
cash. As of September 30, 2002, we had  liabilities  of $35,214.  As of December
31, 2001, we had total assets of $6,302 and liabilities of $39,812.  The limited
operations we conducted  during the quarter  ended  September 30, 2002 have been
discontinued as described elsewhere in this Form 10-QSB.

     The auditor's report on our December 31, 2001 financial statements included
a going concern qualification.

Results of Operations

     We had total  revenues of $13,785 for the three months ended  September 30,
2002  compared to $2,751 of revenues for the three months  ended  September  30,
2001. Our cost of revenue was $7,459 for the three month period ended  September
30, 2002 and -0- for the three month period  ended  September  30, 2001.  We had
general and administrative costs of $10,779 for the three months ended September
30, 2002  compared to $10,229 for the three months ended  September 30, 2001. We
had a net loss of $4,453 for the three months ended  September 30, 2002 compared
to a net loss of $7,478 for the three months ended September 30, 2001.

     We had total  revenues of $23,594 for the nine months ended  September  30,
2002  compared to $7,395 of revenues  for the nine months  ended  September  30,
2001.  Our cost of revenue was $7,459 for the nine month period ended  September
30, 2002 and -0- for the nine month period  ended  September  30,  2001.  We had
general and administrative  costs of $31,849 for the nine months ended September
30, 2002  compared to $48,989 for the nine months ended  September  30, 2001. We
had a net loss of $15,714 for the nine months ended  September 30, 2002 compared
to a net loss of $41,594 for the nine months ended September 30, 2001.

     We  discontinued  all of the  operations  that  generated  the revenues and
expenses  during the three month and nine month period ended September 30, 2002,
during December 2002.

Forward Outlook and Risks

     This  Form  10-QSB   contains  and   incorporates   by  reference   certain
"forward-looking statements" within the meaning of Section 27A of the Securities
Act  and  Section  21E of the  Exchange  Act  with  respect  to  results  of our
operations and businesses.  All statements,  other than statements of historical
facts,  included in this Form 10-QSB,  including those regarding  market trends,
our  financial  position,  business  strategy,  projected  costs,  and plans and
objectives of management for future operations, are forward-looking  statements.
In general,  such statements are identified by the use of forward- looking words
or phrases including,  but not limited to, "intended,"  "will," "should," "may,"
"expects," "expected,"  "anticipates," and "anticipated" or the negative thereof
or variations thereon or similar terminology.  These forward-looking  statements
are based on our current expectations. Although we believe that the expectations
reflected in such  forward-looking  statements are  reasonable,  there can be no
assurance   that  such   expectations   will  prove  to  be   correct.   Because
forward-looking  statements involve risks and uncertainties,  our actual results

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<PAGE>

could differ  materially.  Important  factors that could cause actual results to
differ materially from our expectations are disclosed hereunder and elsewhere in
this Form 10-QSB. These forward-looking  statements represent our judgment as of
the date of this Form 10-QSB.  All subsequent  written and oral  forward-looking
statements  attributable to Viking are expressly  qualified in their entirety by
the Cautionary  Statements.  We disclaim,  however,  any intent or obligation to
update our forward-looking statements.

     No Assurance the Vista  Transaction  Will Be Consummated.  Although we have
entered into an agreement to acquire assets from Vista as described elsewhere in
this Form 10-QSB, the proposed transaction is subject to a number of conditions.
There can be no assurance  that these  conditions  will be fulfilled or that the
proposed acquisition will be consummated. No person should invest in the Company
in reliance that such proposed acquisition will be completed.

     Operating History;  No Assets; No Present Source of Revenues.  We have been
inactive since 2002. We intend to attempt to commence  active  operations in the
future by  acquiring  assets  from  Vista  and by  acquiring  other  operations.
Potential  investors  should be aware  that  there is only a limited  basis upon
which to evaluate our prospects for achieving our intended business  objectives.
We have no  resources  and have had limited  revenues  since our  formation.  In
addition,  we will not  generate  any revenues  (other than  investment  income)
until, at the earliest,  the  consummation of the acquisition of the assets from
Vista or some other operation.

     Possibility of Total Loss of Investment.  An investment in the Company,  is
an extremely  high risk  investment,  and should not be made unless the investor
has no need for current  income from the invested  funds and unless the investor
can afford a total loss of his or her investment.

     Additional  Financing  Requirements.  We will  likely be  required  to seek
additional  financing in order to fund our operations and carry out our business
plan. We anticipate  that cash  necessary to complete the  acquisition of assets
from Vista will be  obtained  through  the sale of our  securities  to Donald E.
Tucker.  However,  in  order  to  fund  our  operations  and  effect  additional
acquisitions,  we will be required to obtained additional capital.  There can be
no assurance that such financing  will be available on acceptable  terms,  or at
all. We do not have any arrangements  with any bank or financial  institution to
secure  additional  financing  and  there  can be no  assurance  that  any  such
arrangement, if required or otherwise sought, would be available on terms deemed
to be commercially acceptable and in our best interests.

     No public market for  Securities.  There is no public market for our common
stock and we can give no assurance  that an active  market will  develop,  or if
developed,  that it will be  sustained.  It is  unlikely  that any  market  will
develop prior to the consummation of the Acquisition. Even if the Acquisition is
completed,  there can be no assurance  that a trading  market for our securities
will ever develop.

     Auditor's Opinion has a Going Concern  Qualification.  Our auditor's report
dated  March 25,  2002 for the year ended  December  31,  2001  included a going
concern  qualification which stated that our significant  operating losses raise
substantial doubt about its ability to continue as a going concern.

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<PAGE>

     No Appraisal of Vista Assets. We did not obtain an independent appraisal or
valuation of the assets and operations we intend to acquire from Vista.

     We do  not  anticipate  paying  any  dividends  and  any  gains  from  your
investment  in our stock will have to come from  increases  in the price of such
stock. We currently intend to retain any future earnings for use in our business
and do not anticipate paying any cash dividends in the foreseeable future.

Medical Operations Risks

     We intend to acquire assets and operations  from Vista as described  above.
We also intend to attempt to acquire  additional medical products and operations
from time to time as  opportunities  become  available.  Our  operations  in the
medical product industry will subject us to various risks which include, but are
not limited, to the following:

     We Will Operate in a Competitive  Market.  The market for medical  products
and services is  competitive  and new  offerings and  technologies  are becoming
available  regularly.  We cannot  guarantee  that we will  compete  successfully
against our potential  competitors,  especially those with significantly greater
financial resources or brand name recognition.

     If We Fail to Retain Key  Personnel and Hire,  Train and Retain  Additional
Qualified and Experienced Employees,  We May Not Be Able to Compete Effectively.
If the Vista asset purchase transaction is completed, we will hire substantially
all of the employees involved in Vista's Medical Technology Business. Our future
success will depend to a large extent on retaining such employees and recruiting
sufficient  qualified  employees  to fill  vacancies  created  by  attrition  or
expansion of our  operations.  There is likely to be a competitive  labor market
for such staff and there is no  assurance  that we will be able to  attract  and
retain an adequate number of suitable employees.

     We Will Be Subject To Significant Domestic and International Regulation and
May Not Be Able To Obtain Necessary Regulatory  Clearances to Sell Our Products.
We intend to sell medical  devices.  The manufacture and sale of medical devices
intended  for  commercial  distribution  are subject to  extensive  governmental
regulation.  Our failure to comply with regulatory requirements would jeopardize
our ability to market our products.  Noncompliance with applicable  requirements
can result in failure of the regulatory agency to grant pre-market  clearance or
approval for devices,  withdrawal or  suspension  of approval,  total or partial
suspension of production,  fines, injunctions,  civil penalties, refunds, recall
or seizure of products and criminal  prosecution.  Medical devices are regulated
in the United  States  primarily  by the FDA and, to a lesser  extent,  by state
agencies. Sales of medical device products outside the United States are subject
to foreign regulatory requirements that vary from country to country. Generally,
medical devices  require  pre-market  clearance or pre-market  approval prior to
commercial  distribution.  A  determination  that  information  available on the
medical device is not sufficient to grant the needed  clearance or approval will
delay market  introduction  of the product.  In  addition,  material  changes or
modifications  to, and  changes in intended  use of,  medical  devices  also are
subject to FDA review and clearance or approval. The FDA regulates the research,

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<PAGE>

testing, manufacture, safety, effectiveness,  labeling, storage, record keeping,
promotion  and  distribution  of medical  devices  in the United  States and the
export of unapproved  medical devices from the United States to other countries.
The time  required  to obtain  approvals  required by foreign  countries  may be
longer or shorter than that required for FDA  clearance,  and  requirements  for
licensing may differ from FDA requirements.  The current regulatory  environment
in Europe for  medical  devices  differs  significantly  from that in the United
States.

     We  Expect  to  Encounter  Rapid   Technological   Change  and  Significant
Competition.  The  medical  device  market  in which we  intend  to  compete  is
characterized by intensive development efforts and rapidly advancing technology.
Our future  success will depend,  in large part,  upon our ability to anticipate
and keep pace with advancing technology and competing innovations. We may not be
successful in  identifying,  developing  and marketing new products or enhancing
our  existing  products.  We  believe  that a number  of large  companies,  with
significantly  greater  financial,  manufacturing,  marketing,  distribution and
technical resources and experience than ours, are focusing on the development of
visualization products for minimally invasive microsurgery.

     Our Profitability in the Visualization  Technology  Business to be Acquired
From Vista is  Directly  Related  to the Level Of  Reimbursements  for  Surgical
Procedures Using the Offered Products.  If the Vista asset purchase  transaction
is  approved,  we intend to market the  products  now  marketed  by Vista in its
Medical Technology  Business.  Our profitability will be directly related to the
level of payments for the  surgical  procedures,  in which our products  will be
involved,  either  by  Medicare  or  private  insurance  companies.  We could be
adversely  affected  by changes in payment  policies  of  government  or private
health care payors,  particularly  to the extent any such changes affect payment
for the  procedure  in which  our  products  are  intended  to be used.  It is a
continuing  trend in U.S.  health care for such  payments to be under  continual
scrutiny and downward pressure. We believe that reimbursement in the future will
be subject to increased  restrictions,  both in the United States and in foreign
markets and that the overall  escalating  cost of medical  products and services
has led to and will  continue to lead to increased  pressures on the health care
industry,  both  foreign  and  domestic,  to  reduce  the cost of  products  and
services, including products which we offer.

     We  expect  that  our  products  typically  will be used by  hospitals  and
surgical centers,  which bill various  third-party  payors, such as governmental
programs and private  insurance plans, for the health care services  provided to
their patients.  Third-party payors carefully review and increasingly  challenge
the prices  charged for medical  products  and services or negotiate a flat rate
fee in advance.  Payment rates from private companies also vary depending on the
procedure  performed,  the  third-party  payor,  the  insurance  plan and  other
factors.  Medicare compensates hospitals at a predetermined fixed amount for the
costs  associated  with an  in-patient  hospitalization  based on the  patient's
discharge diagnosis and compensates  physicians at a pre-determined fixed amount
based on the procedure performed, regardless of the actual costs incurred by the
hospital or  physician  in  furnishing  the care and  unrelated  to the specific
devices or systems used in that procedure. Medicare and other third-party payors
are  increasingly  scrutinizing  whether to cover new  products and the level of
payment  for new  procedures.  The  flat  fee  reimbursement  trend  is  causing
hospitals to control  costs  strictly in the context of a managed care system in
which health care providers contract to provide  comprehensive health care for a
fixed cost per person. We are unable to predict what changes will be made in the
reimbursement methods utilized by such third-party payors.

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<PAGE>

     If we obtain the necessary foreign  regulatory  registrations or approvals,
market  acceptance of our products in international  markets would be dependent,
in part, upon the acceptance by the prevailing  health care financing  system in
each  country.  Health care  financing  systems in  international  markets  vary
significantly  by country  and include  both  government  sponsored  health care
programs  and  private  insurance.  We cannot  assure you that  these  financing
systems will endorse the use of our products.

     We May Be Subject To Product  Liability  Claims And Have Limited  Insurance
Coverage.  By engaging in the medical devices business, we will face an inherent
and  significant  business risk of exposure to product  liability  claims in the
event that the use of our products results in personal injury or death. Also, in
the event that any of our products proves to be defective, we may be required to
recall or redesign  such  products.  We will need to attempt to obtain  adequate
product liability  insurance  coverage.  If we are able to obtain insurance,  of
which  there can be no  assurance,  our  coverage  limits may not be adequate to
protect  us  from  any  liabilities  we  might  incur  in  connection  with  the
development,  manufacture and sale of our products.  Product liability insurance
is expensive and in the future may not be available to us on  acceptable  terms,
if at all. A  successful  product  liability  claim or series of claims  brought
against  us in excess  of our  insurance  coverage  or a  product  recall  would
negatively impact our business.

                         ITEM 3. CONTROLS AND PROCEDURES
               EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

     We maintain  disclosure controls and procedures that are designed to ensure
that  information  required  to be  disclosed  in our  Exchange  Act  reports is
recorded,  processed,  summarized and reported within the time periods specified
in the SEC's  rules and forms,  and that such  information  is  accumulated  and
communicated to our management,  including our chief executive officer and chief
financial officer, as appropriate,  to allow timely decisions regarding required
disclosure.  In designing and evaluating the disclosure controls and procedures,
management  recognized  that any  controls  and  procedures,  no matter how well
designed and operated,  can provide only  reasonable  assurance of achieving the
desired control objectives, and management necessarily was required to apply its
judgment in evaluating the  cost-benefit  relationship of possible  controls and
procedures.

     Within 90 days prior to the date this report was signed,  we carried out an
evaluation,  under the supervision and with the participation of our management,
including  our chief  executive  officer  and chief  financial  officer,  of the
effectiveness  of the  design  and  operation  of our  disclosure  controls  and
procedures.  Based on the  foregoing,  our  chief  executive  officer  and chief
financial  officer  concluded  that  the  Company's   disclosure   controls  and
procedures were effective.

Changes in Internal Controls

     There have not been any significant  changes in our internal controls or in
other factors that could  significantly  affect these controls subsequent to the

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date of their  evaluation.  There were no significant  deficiencies  or material
weaknesses, and therefore no corrective actions were taken for the quarter ended
September 30, 2002.

                           PART II - OTHER INFORMATION

Item 1. Legal Proceedings.  We are not a party to any legal proceeding.

Item 2. Changes in the Rights of the Company's Security Holders.  None.

Item 3. Defaults by the Company on its Senior Securities.  None

Item 4.  Submission  of  Matters  to Vote of  Security  Holders.  No matter  was
submitted  to a vote of the  Company's  security  holders for the quarter  ended
September 30, 2002 or from that date through December 31, 2003.

Item 5. Other Information.

Item 6(a). Exhibits. 31.1  Certification  by the Chief Executive  Officer
                     pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

                     31.2 Certification by the Chief Financial Officer pursuant
                     to Section 302 of the Sarbanes-Oxley Act of 2002.

                     32.1 Certification by the Chief Executive Officer pursuant
                     to Section 906 of the Sarbanes-Oxley Act of 2002.

                     32.2 Certification by the Chief Financial Officer pursuant
                     to Section 906 of the Sarbanes-Oxley Act of 2002.

Item 6(b). Reports on Form 8-K. No reports on Form 8-K were filed by the Company
during  the  quarter  ended  September  30,  2002.  Form 8-K's were filed by the
Company on December 16, 2003 and December 24, 2003.

                                    SIGNATURE

     In accordance  with the  requirements  of the Exchange Act, the Company has
caused this report to be signed on its behalf by the undersigned  thereunto duly
authorized.

Dated:   January 8, 2004              VIKING SYSTEMS, INC.

                                  By  /s/ Thomas B. Marsh
                                      Chief Executive Officer, President

                                  By  /s/ Dennis Blomquist
                                      Chief Financial Officer


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